Thursday 6 July 2023

The Tenant Reform Bill - Will It Be CHAOS for South London Landlords!?

In case you missed it

The government in its infinite wisdom to make life better for everyone (but somehow worse for good landlords like your good self) has proposed quite a number of things that would have the average landlord gasp and get dialling for that ambulance quicker than you can call a tenant who's late on a rent payment!

Here's what the brainiacs in power are wanting to lumber upon us, property owners of South London:

Section 21 bye bye

They are proposing the abolition of the favoured S21 notice. This means that unless the tenant cocks up magnificently you have to wait until they serve you notice. One month of course... So you are stuck with Section 8 notices, under which of course we know there are 17 grounds you have to ask a judge for your property back (remember only a few of these are mandatory, the vast majority are discretionary grounds - 10-17).

Periodic tenancies only here

So rather than an initial fixed term the tenants will be able to stay as short as they like effectively. This is a particular pain for those that dabble in the student market, who often insist on giving notice so they can bugger off for the summer. They don't realise that it will be a royal PAIN to find new accommodation in the summer months when they return at the height of the lettings market of course, leading them to overpay for something inferior, but like with anything these kids can't be told. They'll be able to give you a month notice and if you get notice in a bad month like november it's likely you'll have a void over Christmas. No more running 12 month fixed terms from August to August or September to September, you'll be at the tenant's mercy as to when they'd like to leave, unable to plan ahead. I can't see this being a win for anyone, who in their right mind wants to move in under a year? The associated costs with moving are rising (as well as landlords' costs such as inventories, deposit paperwork and so on) so long term lettings are in everyone's best interest.

Ombudsman for Landlords

Just like agents landlords will be required to join an ombudsman scheme. Honestly I think this is super zealous, bearing in mind in 2021 the OFT and Trading Standards received a total of 21,245 complaints about landlords. The total number of landlords in the UK in 2020-2021 was 2.74 million. This means that the percentage of landlords who received a complaint was 0.78%. And this supposedly requires ombudsman membership for all! I wonder how much that's going to cost us South London landlords???

Tar and Feather

In case I hadn't outraged you enough already, do indulge in the whole white paper here. The Renters (Reform) Bill is (thankfully) still currently in its draft form. It must still go through several readings in the House of Commons and House of Lords, where the contents will be discussed and potentially amended, before receiving royal assent and becoming law. This whole process is anticipated to take around a year, with the new legislation expected to come into force in early 2024. I eagerly await... I would also hope that any fundamental changes are permitted a period of transitional implementation once the legislation is passed. This would allow landlords and tenants time to adjust to the new rules and regulations. However seen the government's past performance on this front I wouldn't bank on it. Law not followed, landlord bad, landlord fined...

There is still some way to go before the final proposals become legislation. I will of course keep you informed of the latest and if you are in doubt then do reach out to me for a no-obligation chat. Meanwhile stay on the right side of the regulations to avoid fines or taxes. Well, avoid isn't possible so let's just call it minimising liabilities and limiting risk exposure, it's a minefield!

Had enough of letting? Let me do the hard work for you. Start by getting a valuation from my valuation tool online and see how the pennies stack up for you. If you'd like to have a conversation in person then by all means reach out and let's get talking

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